Auto Service World
News   April 28, 2008   by Auto Service World

Environment Canada estimates cost of VOC compliance at $322 million


The incremental costs for automotive refinish shops to comply with federal government’s new VOC emission regulations is estimated by Environment Canada to be $322 million over a 25-year period. In the economic analysis that accompanies the VOC regulation, the agency calculates the one-time equipment costs to be $141.6 million, plus $125.3 million for one-time replacement of automotive refinish products. The industry is also anticipated to incur a cost of $55.1 million for training over the 25-year period, bringing the total incremental costs to $322 million.
The government expects to spend $4.5 million for enforcement over that time period, as well as $0.39 million to promote compliance with the regulations.
Environment Canada’s analysis is based on an assumption of 8100 automotive refinish and repair establishments. Approximately 70% of those facilities are considered small and medium repair shops, with 1 to 5 employees and revenue up to $400,000.
Comparing the incremental costs to average revenues, Environment Canada’s analysis concludes that the incremental cost represents about 2% to 2.5% of average annual revenue for most shops.
Environment Canada has approached other federal government departments to determine if any government programs are available to assist with the costs to small business, and has identified the Canada Small Business Financing Program from Industry Canada as an option. The program can help small businesses get up to $250,000 in financing for the purchase or improvement of assets such as land, buildings and equipment.